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I would only consider that option of a mortgage at that age if the people involved did not have any additional cash savings. In other words, it they had good income flow from pensions and social security, but lacked "cash" to offset those big unexpected and expected expenses that they will face where their monthly check could not cover it, then yes it might be wise. But otherwise I would not suggest it.
Even the house if paid in full could serve as a piggy bank for a line of credit for big emergencies if need be, as long as they kept at least $20,000 available for the smaller ones, and tried to replenish it monthly when they had to tap it.
I think I found the perfect house for us, it's a 3 br 2 ba double car garage with only 1,080 sq ft which is the perfect size for us and with the size the utilities are little. Very nice and secure neighborhood there is only one way in and out so the traffic you see sort of belongs there. I like that.
My wife has a bedroom for a lady cave, I have my bedroom for my man cave and together we have our bedroom where we sleep. Kitchen/dining is nicely laid out and there is a small living/sitting room and we never use ours anyway. We could really live in a 500 sq ft house if all we had was what we use.
I want a shallow in ground pool for the backyard so the grandkids have a place in summer. "Shallow"? It's a normal size pool but does not have a deep end... about mid chest high in the "deep end" and waist high in the "shallow end. Very safe for young children but that is what we had when we were growing up and our house was where all the kids went. With eight kids you couldn't dive, couldn't go under to the deep end but it was great for water volley ball and tag. With three and four year old grand kids there is no way I could have a pool with a deep end.
As far as heirs I am not planning on leaving anything to them other than a life insurance policy that is enough to cover all our final expenses and then some.
We'll probably just pay for it but I wanted to ask.
I don't think you mentioned what your income is. For example, my dad has a govt. pension and will make the same amount for the rest of his life. (or my mom will, if he predeceases her) So if they were in your shoes, they might want to go for a low interest mortgage and invest a large chunk of that equity from the sale of the first home. They'd be secure in the knowledge that they could always make the mortgage payment.
I would only consider that option of a mortgage at that age if the people involved did not have any additional cash savings. In other words, it they had good income flow from pensions and social security, but lacked "cash" to offset those big unexpected and expected expenses that they will face where their monthly check could not cover it, then yes it might be wise. But otherwise I would not suggest it.
Even the house if paid in full could serve as a piggy bank for a line of credit for big emergencies if need be, as long as they kept at least $20,000 available for the smaller ones, and tried to replenish it monthly when they had to tap it.
This is so weird. Why is it OK to give a 70 year old a 30 year mortgage? Sorry this is insensitive...but what are the chances they are going to pay it off? What if you are 80? Can you take out a 30 year mortgage? What about 90?
Look OP if the banks will lend it and you may not live to pay it back, then go for it. You can enjoy your money during your life to do whatever you want...and still live in a nice house.
The downside is that if you have a problem, the bank can foreclose on you, and you could forefit all the money you put into the house. If you have automatic payments then even if you forget, it should not be a problem. But why risk it?
' age is never a factor in a loan approval. In fact, it's illegal for lenders to discriminate against borrowers on that basis, Becker says. That's because age is a protected category within the Equal Credit Opportunity Act, a federal law that also bars credit discrimination based on a borrower's race, color, religion, national origin, sex, marital status or receipt of public assistance benefits."
many times the bank just refinances the balance to the heir until it is payed for or sold.
the house has to be payed off by the estate or whomever inherits it.
Just don't forget that out of that $20k profit comes closing costs, real estate commission, moving expense, and things you need to settle into the new house (paint, appliances, window treatments, lawn & garden expense, fence, etc.). Just sayin'...
This is so weird. Why is it OK to give a 70 year old a 30 year mortgage? Sorry this is insensitive...but what are the chances they are going to pay it off? What if you are 80? Can you take out a 30 year mortgage? What about 90?
Look OP if the banks will lend it and you may not live to pay it back, then go for it. You can enjoy your money during your life to do whatever you want...and still live in a nice house.
The downside is that if you have a problem, the bank can foreclose on you, and you could forefit all the money you put into the house. If you have automatic payments then even if you forget, it should not be a problem. But why risk it?
Even if both die the bank still gets either their money (from settlement if a heir to owners wants to take home over or sells it) or they sell the house off and get a return that way.....with the payments & interest the bank have received for the years mortgage was being paid plus whatever they can sell the house for they would almost always make their money back.
Quote:
Originally Posted by Stripes17
Just don't forget that out of that $20k profit comes closing costs, real estate commission, moving expense, and things you need to settle into the new house (paint, appliances, window treatments, lawn & garden expense, fence, etc.). Just sayin'...
Excellent point...wouldn't take long to whittle away that $20K on all that stuff having nothing left to invest or keep liquid. Going the other route ($116 K) you'd still have about $100K left over to play with.
An issue to be examined by an investment planner is which is easier to protect from seizure if extensive medical care is needed and Medicaid payments exceed the couple's ability to pay. In many cases a primary home can be protected but cash in the bank can be attached. I don't have the answer but other than this consideration, I'd have no problem taking out the mortgage and keeping the cash around.
We are considering buying a different house that is handicapped accessbile should the need arise. so we are in similar boat, but not going to kid ourselves {we are 56,52 this year}:
here are some other things to consider when buying a new or different house:
1} property tax will almost ALWAYS go UP, so your mortgage +Taxes will go up too.
2} even if brand new, at the 5, 10, 15, 25, or even 30 year point {if you are still alive then} there are BOUND to be things go wrong with the house that will 'add': to your "10%" cost of home: for example our 1983 home we just in the last 3 years we repaced; the FURNACE; the WATER HEATER; the washer; the dryer; the ROOF; the stove; had other repairs done to essentially the 'new furnace' at about 1/3 the cost of it when it was brand new...JUST out of warrantee, naturally; power washed the house. JUST to NAME A FEW items of consideration.
3} Is the new house adaptable if one of you needs, say, a wheelchair? can you use the bath that way? Our current one isn't.
4} who will take care of, say, mowing the lawn or snow removal {if applicable}, garbage disposal as you age and "can't do" anymore?
5} can you afford other house things: MAintenance, a wheelchair ramp, new flooring, remodel if need be for handicapped accesibility or the like {like we really need new windows}?
6} that "10%" of income can grow in cost, as the taxes go up and your income stays about the same, or will your income grow in the years too?.
7}utilities will go up, too,
8} ONE BIG UNCOVERED MEDICAL expense can BANKRUPT your $116K in a hurry! My shoulder surgery just cost about $65K,and my spouse just had {minor}?} surgery @ $15K. Fortunately, Mine covered mostly by insurance, MOH's only about 1/2 covered by insurance. I have to have the other shoulder done, and my spouse will eventually need a hip replacement!
9} GOOd thing we DON'T yet need: a bath remodel or wheelchair ramp added to facilitate one of us. {This house is IN NO WAY conducive for that without a MAJOR remodel. we'd have to give up a BR for a bath we could wheelchair use. And remodel a STUPIDly wrong built "foyer" and chop into the kitchen to "fix it", making the kitchen then not wheelchair accessible!. So to move bath, kit, BR and foyer for wheelchair, we'd have to gut the house and start all over, hence our dilemma.}.
10} we will each inherit a house {unless sold to pay bills}, one a ranch mostly accessible, and one a split level NOT condicive to handicapped living. So we MAY have other options, but are planning on our own 'just in case'.
11} if your house is PAID FOR, you can usually get some help, and they don't count the value of your home as a "asset', as you live in it, so that can be an advantage if you need services somewhere along the line{and don't assume you won't}. AND one partner can stay with the house "in the community" while other goes to, say, a nursing home. At least here.
Buy a condo for cash and never have to make a mortgage payment, ever. No exterior maintenance/yard work etc. It is probably possible to buy a condo for less than a downsize house.
This sounds great; only drawback is "no yard," We have a huge yard, 3/4 acre. Love the house and yard; but really need to downsize. Seems like last summer all we did was mow, mow, mow. Thought about getting a goat like the previous owners did...............there again, nahhh. Hiring maintenance is just prohibitive at this time. Kids...(they used to fight over who would mow the lawn and earn some cash, knocking on the door with lawnmower ready; where did they go? )
Anyway, a townhouse sounds pretty fine to me. The stairs may be a problem later on. Still, we need the dirt, flowers, a few herbs and veggies a little patch of green and maybe a rock garden. A condo may be a little too confining after "playing," in the yard, all these years. Would like some freedom to travel and live a little in the good old summer time.
A friend of mine really did great; bought a townhouse, when prices were low. The HOA is great! Low fees, (so far) she has been there over 10 years. The HOA covers the front lawn maintenance, painting (outside), gutters, roof. Snow removal is not included; but the sidewalks and driveway are not huge.
What is even better for her; the value has doubled!!
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